Share this:

Adapted from Gov. Paterson’s remarks yesterday to the Association for a Better New York.

WE have to take a re alistic view of New York state’s budget.

The budget presented to me when I took office last month was too big and too bloated, assuming about 5 percent growth in our state economy. It followed what was really the growth of personal income.

How much more foresighted would it have been to plan growth of 2 percent to 2.5 percent, rather ballooning out a lot of our revenue forecasts and our expenditures.

Had we taken that other approach, even if we were wrong, we would have returned a billion to a billion and a half dollars to a sagging economy – and been in better shape for our budget for 2009-2010, which has a built-in 3.6 percent deficit.

Instead, we created a situation where, after the transition in the administration in mid-March, we were going down a road where the Legislature had set its priorities based on the budget forecast that we had already acquired.

Who can blame them? No one. But who can remind them? We can. We can remind them of the terrible truth that governments have faced when they have misestimated revenues, when they have used one-shots to solve all their problems, when they have used debt to try to refinance their accounts, and when they have come up with gimmicks to solve real problems.

Look at tax receipts from our 20 largest taxpayers, corporations and banks. By the third week of March in 2007, we had received $533 million from them. In 2008, it was $72 million – 14 percent of what we’d gained last year at an analogous time.

Therefore, though we have cut our budget, the fact is most of those savings will be eaten up as soon as the April economic forecast hits.

We vitally need to understand that our economy is reeling. That we have got to address these issues. And not by taxing anybody: We have to tighten our belts and be far more fiscally sound and prudent in terms of the revenues that we are spending.

*

Since becoming governor, I’ve heard from people I hadn’t been in touch with for years. A friend from primary school, Randy San Antonio, told me he moved to Dallas 20 years ago. Another friend, Randy Watts, had moved to Reno.

A friend from Syracuse, Marvin Lee Simmons, said he’s working in Lower Manhattan. I said we should get together on the weekend – and he said, “Well, I don’t live in New York, I live in Western Pennsylvania.” Jeff and Stacey Stackhouse wanted to start a business on Long Island. They moved two years ago – they’re trying to start their business in Charlotte, NC.

They couldn’t pay the taxes here. They love New York, but felt that they had to move.

The fact is that 28 percent of college graduates from Long Island are leaving the state; 30 percent of college grads from Upstate are leaving to places like South Carolina, to Nevada, to even parts of California, New Mexico, Arizona, Florida – looking for opportunity.

New York has 14 percent fewer African-American families than it had 12 years ago. They are going back to the states of South Carolina, Alabama and Georgia. Together, those three states have 15 percent less population than New York, but they have three times as many businesses owned by African-Americans.

Drive over the George Washington Bridge to Paramus or Edgewater, NJ, and you see Puerto Ricans who used to live in East Harlem. They fought, and they worked, and they became middle class. They didn’t move to the suburbs of New York – they moved to New Jersey.

*

So I’ve decided that, when we get this budget passed, I am going to go to every legislator and talk to them eyeball to eyeball about the problems with this economy. We are going to fight to address the issues in our state budget that need to be addressed:

* Enterprise zones became the most glorified discretionary member items in New York state history. Have the economic empowerment zones actually solved the problem? They have not.

* The STAR program. The idea was to give back to individuals who have high property taxes. But property taxes went up 7 percent every year between 2001 and 2005. Maybe we should change the system. Maybe we have to retract STAR.

* We have 640 public authorities, only 11 of them regulated by the Public Authority Control Board. Maybe we should find out what the other 629 do, because they consume billions of your and my dollars every year in taxes.

This is the kind of hard-core cutting that we need to do in our budget next year, so that we can cut 5 to 10 percent off the top – instead of balancing the budget on those who need services, on the middle class or people who are lucky enough to make a million dollars. We hold individuals hostage because of our inability to manage effectively in this crisis.

What I want you to understand is that this is not a new governor responding to an economic crisis. This is a new governor trying to create fiscal reality in the minds of those who are in decision-making capacities in this state.

What this state is going to need to reverse its spending binge is strong leadership from the executive levels. So when we balance this budget, and when we put our economy back on the right track, that will be the most important test of leadership, because that will be the time when we learn, when we have added resources, whether we have the prudence that guides our fiscal decision-making.